Giving gifts at Spring Festival is an old custom in China. Here, as everywhere, people often receive items they don’t really need, so selling the goods for cash has become quite popular. In response to demand, the number of gift recycling outlets has mushroomed. But this new growth industry is causing concern: it upsets the normal market order and provides a breeding ground for corruption.
Nowadays, gift recyclers are ubiquitous in major cities and are plentiful even in smaller towns. Most of them operate under the cover of licensed tobacco and alcohol shops. In Jiangxi Province's Nanchang City, for example, there are some 13 recycling outlets along a single one-kilometer stretch of Yuzhang Road. For customer convenience, some of the bolder proprietors even post their mobile phone numbers on their shop signs, offering door-to-door service.
Most of the recycled gifts are high-grade tobacco and alcohol, which are resold for prices far lower than normal. One operator boasts that he can purchase recycled luxury-brand Zhonghua cigarettes for 450 yuan (US$54.4) per carton, while the normal price in a Beijing superstore is over 650 yuan (US$78.5). Another recycler purchases his leading brands of liquor, Wuliangye and Maotai, for 220 yuan (US$26.5) and 140 yuan (US$16.9). The average retail prices of Wuliangye and Maotai are 350 yuan (US$42.2) and 320 yuan (US$41.1).
The people selling their gifts to these shops seldom haggle. According to the owner of one licensed alcohol and tobacco franchise outlet, there is an unwritten rule that they refrain from asking about the sources of the gifts. But frequently, the items have come from people seeking to curry favor with those in positions of power, so no matter how low the offer to buy the unwanted gifts, the sellers don’t complain.
Gift recycling has become a headache for local administrators of industry and commerce. The Nanguan Office of Industry and Commerce in Xi'an, Shaanxi Province, has temporarily closed six licensed alcohol and tobacco stores that are suspected of dealing in this business. It has told them to correct irregularities in their retail operations. According to Dong Hongjun, an official with the office, the gift recycling business disrupts order in the market as well as in the tax base, since all transactions are conducted under the table.
While some of the people selling goods in the shops are simply getting rid of a few items sent by friends and relatives, Jiang Jinshi, a professor at Shaanxi Normal University, says that the majority are corrupt individuals who are converting property bribes to cash. The gift recycling business is no more legitimate than money laundering or fencing stolen goods.
(China.org.cn by Wu Nanlan, February 22, 2004)
